Confused.com says car insurance premiums are soaring, as insurers try to deflect blame

The Association of British Insurers seems to have forgotten that it is its members that are responsible for setting prices, and they have increased prices to boost profits

Cars are getting more complex, one of the excuses used by the ABI for its members hiking premiums (Rex)

Every year they meet in a darkened room before an iron brazier, wearing black cowls, carrying flaming torches: they are the car insurance illuminati and they are out to get you!

This dastardly organisation, that sets the price of your premiums, includes Government ministers, repair shop owners, carmakers, cold callers and, of course, the worst of the lot, ambulance chasing lawyers.

According to figures released by Confused.com, the price comparison website, when they met last year they slapped a 14 per cent increase on the average bill, equivalent to £95 on the average premium. The average cost of a comprehensive policy is now £767, the highest it has been since 2012. Some people will pay very much more than that.

This year you can bet the insurance illuminati are gearing up to give the hard pressed motorist yet another kicking. They’re evil! On the level of super villains. Or even Donald Trump.

Does that sound ridiculous? As if your columnist had indulged in something illegal before sitting down to work?

Well here’s the thing: It’s not all that far away from what the insurance industry would have you believe.

In response to Confused.com’s numbers here’s what James Dalton, director of general insurance policy at the Association of British Insurers (ABI), had to say: “Pressure is growing on premiums. Cold callers and ambulance-chasing lawyers are still finding ways to exploit the system, with government data suggesting a 5 per cent increase in whiplash style claims.

“This is driving up costs for honest motorists. In addition, the Government has doubled Insurance Premium Tax in just over a year, and repair bills are going up as cars get more sophisticated.”

You know what comes next: Government should can the tax increase and accident victims should be denied any compensation if bad drivers smash into their cars. Oh, and perhaps our friends in the motor industry might like to think about designing cars that are cheaper to repair. As if this would do anything other than increase his members’ profits.

Mr Dalton, it seems, actually expects people to buy his bunk. Given the bunk that some people have been buying of late, perhaps he has good reason.

The reality, of course, is that insurers set the price of car insurance premiums, based on how much they think they can get away with charging and with the aim of making as much money as possible. Their primary interest is not the “honest motorist” that Mr Dalton cries crocodile tears over. It is their own profit margins, to which the bonuses of their executives are supposedly linked (although they usually manage to get paid regardless).

Mr Dalton and the ABI are cynically trying to deflect blame from the actions of their industry and the fact that insurance premium levels are set not by some mythical coalition of baddies, but by insurance companies.

Yes, insurance premium tax is rising. But the industry isn’t obliged to pass the cost on. The last time the Government raised VAT many retailers absorbed the cost. The insurance industry, however, is none too keen to follow suit.

As for “ambulance chasing lawyers”? This is perhaps the ugliest of Mr Dalton pronouncements. It seems he would seek to deny victims of a horrible event – being injured through involvement in an accident that is the fault of someone else – compensation that justice demands they receive.

If his industry is bothered about allegedly false whiplash claims it could fight them, but often chooses not to. It could also help “honest motorists” by charging the bad ones more, thus insuring it is they that meet the costs of their misdeeds. But, again, this doesn’t always happen.

Yes, cars are getting more sophisticated and perhaps they are harder to repair. But they’re also getting safer. And the Competition Commission had some very unflattering things to say about the way the insurance industry handles claims and repairs, lambasting a “complex chain” for the settlement of them that loads costs on to, you’ve guessed it, Mr Dalton’s honest motorists. The market, said the watchdog, is not working well for consumers.

Mr Dalton’s statement is entirely self serving and should be treated with the contempt it deserves. In the meantime, the best way to stop his industry from skewering you is to click on to Confused.com, or one of its rivals, and to find a cheaper quote if your current insurer tries to hit you with a £95 increase (or more). It’s still a fact that too few of us do that, and it makes life easier than it should be for a greedy industry.

Read More: Why is car insurance so expensive?